Dec. 10 (Bloomberg) -- Natural gas futures declined to a
six-week low in New York on forecasts for moderate temperatures
that would curb demand for the heating fuel.

Gas dropped 2.6 percent after Commodity Weather Group LLC
in Bethesda, Maryland, predicted normal or warmer-than-normal
weather in most of the lower-48 states through Dec. 24. The low
in New York on Dec. 15 may be 40 degrees Fahrenheit (4 Celsius),
8 higher than the usual reading, according to AccuWeather Inc.
in State College, Pennsylvania.

“The market is under pressure because of the mild weather
forecasts and weak seasonal demand,” said Gene McGillian, an
analyst and broker at Tradition Energy in Stamford, Connecticut.
“It’s starting to look like we’re going to see moderate
temperatures until the end of the year.”

Natural gas for January delivery fell 9.1 cents to settle
at $3.46 per million British thermal units on the New York
Mercantile Exchange. The closing price was the lowest since Oct.
26. The futures are up 16 percent this year.

January $3.25 puts were the most active gas options in
electronic trading. They were 1.2 cents higher at 3.2 cents on
volume of 1,999 contracts as of 3:08 p.m. Puts accounted for 57
percent of options volume.

Hedge funds cut bets on U.S. natural gas by the most in
nine months as warmer-than-normal weather curbed heating demand
and left a glut of the fuel in storage.

Money managers reduced net-long positions, or wagers on
rising prices, by 36 percent in the week ended Dec. 4, according
to the Commodity Futures Trading Commission’s Dec. 7 Commitments
of Traders report. It was the biggest weekly drop since March.

Weather Implications

“We continue to see intermediate-term risk down to the
$3.25 area in the absence of colder temperatures, said Tim
Evans, an energy analyst at Citi Futures Perspective in New
York, in a note to clients today.

The low temperature in Chicago on Dec. 15 may be 30 degrees
Fahrenheit, 7 above normal, according to AccuWeather. About 50
percent of U.S. households use gas for heating, Energy
Department data show.

This year will probably overtake 1998 to become the warmest
on record in the contiguous U.S. states, the National Oceanic
and Atmospheric Administration said in a monthly climate report.
The first 11 months were the warmest start to any year since the
nation began keeping records in 1895, NOAA’s Climatic Data
Center said Dec. 6.

U.S. natural gas output in the lower-48 states rose to a
record in September as new wells in the Northeast’s Marcellus
shale formation started producing, the Energy Department said.

Gas Output

Production increased 0.6 percent to 73.05 billion cubic
feet a day, the highest level in data going back to 2005, the
department’s Energy Information Administration said in the
monthly EIA-914 report, released Nov. 30 in Washington.

The report covers gas gross withdrawals, which include gas
used for repressuring, quantities vented and flared, and non-hydrocarbon gas removed in treating or processing operations.

U.S. gas inventories fell 73 billion cubic feet in the week
ended Nov. 30 to 3.804 trillion, erasing a year-over-year
surplus for the first time in 2012, according to the Energy
Department.

Supplies were 0.9 percent below year-earlier levels and 4.6
percent above the five-year average in the week ended Nov. 30.
The surplus to the average has declined from a six-year high of
61 percent in March, department data show.

LNG Permit

Sempra Energy said today it filed a permit application with
the Federal Energy Regulatory Commission to build a liquefied
natural gas export terminal at its existing Cameron LNG site in
Louisiana. The company began the pre-filing process in April.
Sempra said it may break ground on the project in the fourth
quarter of 2013.

The Cameron terminal is awaiting Energy Department approval
to export to countries with which the U.S. doesn’t have free-trade agreements. Gas exports would have “net economic
benefits” for the U.S., according to a study commissioned by
the department and released Dec. 5.

The boom in oil and natural gas production helped the U.S.
cut its reliance on imported fuel. America met 83 percent of its
energy needs in the first eight months of the year, department
data show. If the trend goes on through 2012, it will be the
highest level of self-sufficiency since 1991.

Gas futures volume in electronic trading on the Nymex was
404,782 as of 2:55 p.m., compared with the three-month average
of 362,000. Volume was 386,743 on Dec. 7. Open interest was 1.15
million contracts. The three-month average is 1.16 million.

The exchange has a one-business-day delay in reporting full
volume and open interest data.